Soybeans Gain as Dry Weather May Cut Argentina Crop; Corn Fell

Feb. 1 (Bloomberg) -- Soybeans rallied to a six-week high
on speculation that warm, dry weather will erode yields in
Argentina, increasing demand for tightening U.S. supplies. Corn
declined.

Most of Argentina was dry the past 24 hours, and the main
growing region will be warm and dry for another 10 days, T-Storm
Weather LLC in Chicago said in a report. Since Dec. 20, the
nation has been drier than last year, when it had a drought. The
country’s oilseed production is seen as low as 47 million metric
tons, 13 percent smaller than the U.S. Department of Agriculture
forecast, Deutsche Bank Securities Inc. said in a report.

“The markets are reacting to the potential for smaller
crops in Argentina,” David Smoldt, a vice president at INTL
FCStone Inc. in West Des Moines, Iowa, said in a telephone
interview.

Soybean futures for March delivery rose 0.4 percent to
close at $14.7425 a bushel at 2 p.m. on the Chicago Board of
Trade, after touching $14.865, the highest since Dec. 18. Prices
gained 2.3 percent this week, a fourth straight gain.

Argentina’s output will trail a Jan. 11 forecast from the
USDA, a unit of the agency said in a report posted on its
website today.

Corn futures for March delivery declined 0.6 percent to
$7.36 a bushel in Chicago, the biggest loss since Jan. 17.

Prices still rose 2.1 percent this week on speculation that
China, the world’s biggest grain consumer, will increase imports
to curtail rising domestic prices, Smoldt said. Futures on the
Dalian Commodity Exchange are trading at a price equal to about
$10.08 a bushel, data compiled by Bloomberg shows.

“Importing products that China needs helps to stabilize
domestic prices,” Chen Xiwen, deputy head of the Central Rural
Work Leading Group under the State Council, said at a press
conference today.

Corn is the biggest U.S. crop, valued at $76.5 billion in
2011, followed by soybeans at $35.8 billion, government figures
show.